Argentina dismantled key parts of its years-long currency controls and loosened its grip on the peso on Friday as it sealed a $20 billion, 48-month Extended Fund Facility deal with the International Monetary Fund (IMF).
The IMF deal lays out an immediate disbursement $12 billion, and a first review is planned for June with an associated additional disbursement of some $2 billion, the IMF said.
The South American nation’s central bank announced that it will undo a fixed currency peg from Monday, letting the peso freely fluctuate within a moving band between 1,000 and 1,400 pesos per dollar, versus 1,074 at the close on Friday.
Argentina will eliminate major parts of the so-called “cepo” capital controls that have restricted access to foreign currency, the central bank said in a statement.
Companies from this year will also be able to repatriate profits out of the country, a key demand from businesses that could unlock more investment.
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